Does Catholic Social Teaching Require Ever More Government Regulation?

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President Trump’s pledge to reduce regulations on our economy has led to panic among some Catholic scholars and prelates, who imply that Catholic social teaching calls for ever more government regulation. According to a recent story in Our Sunday Visitor, for instance, San Diego Bishop Robert McElroy treated the president’s promises of deregulation as “imminent threats”—as the result of an “erroneous autonomy” that denies the “dignity of the human person and the common good.”

These claims misrepresent both the nature and content of Catholic social teaching. It’s not a partisan political platform. Nor is it a cudgel with which to beat your political opponents and to silence debate. It provides a set of general principles—such as subsidiarity, the common good, human dignity, and private property—that must be applied to concrete situations, and refracted through prudential judgments about science and economics on which faithful Catholics disagree.

You can spend the next year reading papal encyclicals and the Catechism, and you’ll never find the principle “more regulation good, less regulation bad.”

Since 2008, our economy has been burdened with over 20,000 new regulations. This added some 572,000 pages to the Federal Register. Did these new regulations move America closer to the Catholic ideal? Were all of them required by Catholic social teaching? Is any call to reform any of them a denial of human dignity? To ask such questions is to answer them.

When Regulations Attack

In fact, it would be embarrassing if Catholic social teaching did contain such a preferential option for government regulations. After all, regulations aren’t generic commodities. Some are good, some are bad, and some are indifferent. So how do we tell the difference? By studying the consequences, rather than the stated intentions of their advocates. For instance, if an anti-pollution law keeps a paper mill from polluting the water of land owners nearby, by aligning the incentives of all involved, with less drag on the paper market than any live alternative, then it’s probably a good regulation.

Unfortunately, the fiscal, moral, and cultural costs of many regulations exceed their benefits. The takings provision of the Endangered Species Act, for instance, encourages land owners to destroy rather than preserve habitats for endangered species.

Many of our eighty means-tested welfare programs encourage idleness rather than work, and single rather than married motherhood for recipients. Indeed, to judge from its long-term effects, President Johnson’s War on Poverty might just as well have been called the War on the Poor. The 1996 Welfare Reform Act added a work requirement to just one of these programs. Opponents howled that it would create an epidemic of homelessness and poverty among single mothers and their children. Instead, they found jobs, dignity, and a way out of poverty.

Under President Obama, however, even that modest reform was undone, while work requirements for food stamps were waived away in 2009 as part of Obama’s “stimulus” program. As a result, the program has exploded, especially among ABAWDs—able-bodied adults without dependents. Our government “safety net” should encourage and, if needed, subsidize work. Instead, it often does just the opposite.

The barrage of well-meaning “affordable housing” regulations added in the decades leading up to 2008 eroded the underwriting standards in the mortgage market, played a key role in the 2008 financial crisis, and encouraged vice rather than virtue among developers, mortgage lenders, and loan recipients. The Dodd-Frank Act, which was supposed to help prevent another such crisis, created a subtle preference for banks that were already treated as too big to be allowed to fail, to grow even larger and more protected.

The regulations added just since the beginning of 2008 have cost our economy almost a trillion dollars. That affects real people who need real jobs. According to one study, there was a net increase of 421,000 new businesses from 1992 to 1996, and 405,000 from 2002-2006. In contrast, 2009, 2010, and 2011 “saw a net loss of new companies year-over-year—the first time in a generation.” The regulatory burden is at least partly to blame.

Mid-sized companies traditionally have sought the cash to expand by going public in an initial public offering (IPO). Now such companies increasingly seek to be acquired by a larger company. This risk aversion is what you would expect when regulations make it harder to launch and then grow new ventures.

And do I really need to mention the Affordable Care Act, with its egregious ‘HHS mandate,” which, if left in place, would have compelled the Little Sisters of the Poor to provide abortifacients and contraceptives in their health insurance program? Talk about a bad regulation.

So, must good Catholics support every deregulation that President Trump proposes? Of course not. It’s rarely that simple. If we care about our fellow citizens, however, we should take the time to study the real effects of any given regulation, rather than falling for misleading claims that Catholic social teaching treats each new regulation as a good that must be protected.

The views expressed here are those of the author, and do not necessarily represent the views of CatholicVote.org

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Jay W. Richards, Ph.D., O.P., is an Assistant Research Professor in the Busch School of Business and Economics at The Catholic University of America, Executive Editor of The Stream and a Senior Fellow at the Discovery Institute. Follow him on Twitter: @FreemarketJay.

5 Comments

  1. I wonder where a person with the Twitter handle @FreemarketJay stands on government regulation and Catholic social teaching.

    • Exactly where I would expect a Professor in the Busch School of Business and Economics at The Catholic University of America (or any university) to stand on it.

      Regulation inhibits the marketplace.

      • The Church is quite clear in saying that maximum efficiency in the marketplace is not our highest good and that the marketplace needs to be carefully regulated to protect higher human goods.

        JPII:
        “Returning now to the initial question: can it perhaps be said that, after the failure of Communism, capitalism is the victorious social system, and that capitalism should be the goal of the countries now making efforts to rebuild their economy and society? Is this the model which ought to be proposed to the countries of the Third World which are searching for the path to true economic and civil progress? …
        if by “capitalism” is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative” Centesimus Annus, 42

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